What Is Foreclosure?

When a homeowner falls behind on mortgage payments, the lender can eventually force a sale of the property to recover what's owed. The exact process depends heavily on whether the state uses judicial or non-judicial foreclosure.

Michigan and Tennessee are primarily non-judicial states — the lender can foreclose without going to court, which makes the timeline faster. Florida is a judicial state — the lender must file a lawsuit, which takes longer but gives the homeowner more time.

In most cases, selling the home before the foreclosure sale preserves more of your equity and does less damage to your credit than letting the foreclosure complete. The key is acting before the sale date.